But here’s the thing: The annual loss of revenue due to tax cuts is actually closer to $43 billion if corporate tax cuts are counted, which the PBO report did not include. Any way you cut it, that’s a lot of money. So who benefited from these tax cuts?

Media reports cite the PBO’s conclusion that middle income earners reaped the greatest benefit as a percentage of their income. This is misleading. In absolute dollar amounts, the richest got a lot more.

The top 20 per cent of income earners saved $10.9 billion, or 36 per cent of the total, while the bottom 20 per cent got $1.9 billion, or only six per cent. On a pocketbook level, the lowest 20 per cent of income earners have gained less than $500 in tax reductions, while the top 20 per cent have seen their taxes go down by almost $2,000 a year.

The people who need it most got the least. And the people who need it least … well, you’ve heard it before.

To be fair, several of the tax measures introduced since 2005 are progressive. The Working Income Tax Benefit is targeted at low-income workers; those earning between $20,000 and $36,252 receive most of the financial benefit. The GST/HST rate reductions also had a progressive after-tax and transfer distribution impact, with the bottom 10 per cent benefitting about twice as much as the top 10 per cent on a benefits-to-income basis.

While middle and lower-income Canadians may spend their extra money, the rich tend to bank most of their savings — and they got the lion’s share. Tax cuts are one of the least effective ways to stimulate the economy.

What have we gotten in exchange for those tax cuts apart from a few more dollars in our pockets? The Conservative government claims that tax cuts spur consumer spending, investment and job creation. There’s very little evidence to back up this claim. While middle and lower-income Canadians may spend their extra money, the rich tend to bank most of their savings — and they got the lion’s share. Tax cuts are one of the least effective ways to stimulate the economy.

Corporate tax cuts are even worse than income tax cuts in terms of stimulus. Far more jobs would have been created had the government kept this money and invested it in infrastructure and public services.

Tax cuts also end up costing us by starving essential public services of resources. So health care wait times get longer, university becomes less affordable and Canadians have to wait longer before they can collect senior’s benefits.

Tax cuts also gut the government’s capacity to be innovative about reducing poverty, tackling climate change, investing in infrastructure or improving the quality of health, education and other public services.

What could $40 billion buy? A national child care program. A pharmacare plan. Cutting university tuition to 2009 levels. An affordable housing strategy.

When seen in context, that $43 billion a year doesn’t seem like such a bargain after all.

The views, opinions and positions expressed by all iPolitics columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of iPolitics.

4 comments on “The PBO tax report: The rich getting richer”

I hope Canadians are taking notice to this shell game that these Con artists have perpetrated on Canadian taxpayers. We have no choice, pick one, The Conservative Party of Canada who are controlled by the Wealthy and Corporations or The Liberal Party of Canada who are controlled by The Wealthy and The Corporations. Nice country if you are stinking rich.

Parliamentary Budget Office Jean-Denis Frechette is having trouble getting the true figures. However, CRA is on the backs of charitable organizations like PEN, to see that they don’t spend more than 10% on political issues. Isn’t it odd that the CRA would be so persistent on these cases since the Harper Government has made an issue of any who oppose the government’s actions: silencing, hampering of freedom of speech, muzzling… any method to go after those expressing opinions contrary to Mr. Harper and his Conservatives.